Author: Dr Jason Ketter

The Giving USA Special Report (Autumn 2018) provides valuable insight into workplace giving. Workplace giving is defined as “the practice of employees contributing time or money through the workplace.” Historically, when an employee donated through the workplace by giving to the United Way, for example, the employee had limited direct contact with the end charity who benefited from the donation. Further, workplace giving campaigns were decided upon by senior management, not by the employees. This is changing along with other factors affecting workplace giving.

CSR

Workplace giving for a company is often associated with their overall Corporate Social Responsibility (CSR) strategy and objectives. CSR has many aspects, including giving. It is increasingly linked to business strategy, performance, organisational trust, and, importantly, the ability to attract and retain employees. Workers, and Millennials (people born between 1980 and 2000) in particular, are demanding more from their employer when it comes to a company’s CSR; the CSR program influences their participation in a workplace giving program.

MILLENNIALS

Millennials are keen to know how their employer is impacting and contributing to society. Millennials want to work for a company that has strong social and environmental commitments so much that 64% would refuse a potential employer who did not have a strong CSR program. It is important that companies are aware of these feelings, as Millennials have no fear in using social media to provide feedback or share their opinions. Of course, this can impact the workforce, but it can also impact sales. The Millennial CSR Study (2015) found that 91% of the Millennials surveyed would switch brands in a heartbeat if the company were better aligned with a cause important to them, if the price and quality were the same.

DIVERSE WORKFORCE

In addition to the coming of the Millennials in the workforce, other demographics of the workforce are rapidly changing. Sage charities look at the diversify of their donor base — does it represent society at large or reflect some of the diversity of the people the organisation serves? For example, does alumni giving at a university reflect the diversity of the alumni body? The report states, “not only will the future workforce be more diverse in terms of age and ethnicity, but women are also expected to represent a larger percentage of the workplace.”

THE POWER OF WOMEN

The Report highlights how women are more likely to participate in workplace giving programs than men. Further, when men work in departments with more women, these men donate more to workplace giving programs. When it comes to age, research shows that people give as they get older to workplace giving programs, however, this giving decreases near retirement. This presents an opportunity through the creation of an employee alumni program.

STAY IN TOUCH

Too often a long-term employee retires and never hears from the company again. There are resources — for example, volunteer time — to be harnessed from former employees that can support a workplace giving program. A former employee can help liaise with their former colleagues — personally, I accept phone calls or return texts from former colleagues. However, having great dedicated people only helps when they feel connected or recognise the value in helping the charity the company is supporting. Volunteering for the CEO’s pet charity may not be met with enthusiastic cheer.

EMPLOYEE MORALE

Workplace giving is affected by an employee’s alignment with a charity, but also by an employee’s relationship with their employer. Therefore, charities should seek out the pulse of the employee’s morale. A company embattled in a labor dispute, for instance, is likely to negatively impact any type of workplace giving program, especially if the program is in the early stages of development. There could be an argument made that such a program could help to improve workplace relationships, but proceed with caution.

CULTURE OF GIVING

Regardless, it is critical to have employees who are respected and liked to be ambassadors for workplace giving. The Report identifies that employees’ giving behaviour, and the level of this giving, is influenced by their peers. The findings in the Report referenced the article “Philanthropic Identity at Work: Employer Influences on the Charitable Giving Attitudes and Behaviors of Employees” by Jennifer Mize Smith (2013), who found “creating a ‘culture of giving’ in the workplace further positively affected employees’ philanthropic behavior, including support for workplace giving campaigns.”

WORKPLACE VOLUNTEERS

An area addressed in the Report centres on workplace volunteers. These programs are particularly beneficial to charities: awareness is raised among volunteers, projects are tackled that would not have been possible without a corporate partner, and volunteering is seen as an entry point for possible future donations. The latter point is salient; there is the need for nonprofits to commence lasting, meaningful, and deep relationships with a company, as companies have moved away from transactional relationships. If your organisation currently has a relationship with a company, how institutional is the relationship? If your corporate contact were to depart the company, would your workplace giving program cease?

DO YOUR RESEARCH

The Giving USA Special Report (Fall 2018) highlights trends and developments in workplace giving. For many charities, the biggest challenge can be to get their foot in the door of a quality company to commence a workplace giving program. There is plenty of competition and companies have a choice of their non-profit partner. When a charity establishes a workplace giving program with an A-list company, it is important that they do their research and listen to the challenges the company is having, as opposed to listing the company’s problems and the ways they can be solved.

Many nonprofits operate different programs, and this can mean operating between different teams. In these situations, a sponsorship or corporate partners program and a philanthropic program will have particular team dynamics to work with, which may include:

reporting to the same supervisor in the same department

reporting to different supervisors within the same department

reporting to different supervisors in different departments

Occasionally, unhealthy competition can grow between teams. If they view themselves as competing for limited external funds to help advance their organization, there can be a disincentive to collaborate (especially if housed in different departments).

UNHEALTHY COMPETITION

When there are potential supporters being contacted for both corporate sponsorships and philanthropy, this can present a challenge. Some supervisors seek competition between areas as a way to motivate two teams to secure the maximum resources possible. As a result, teams often work harder to make their team look good and the other team look not so good—this will put their team in favour with leadership and, hopefully, secure more resources in the budget for the team.

This internal competition can result in a game of cat and mouse—with prospect information, reports of contact, and “ownership” of the potential supporter. For example, the corporate sponsorship team may be hesitant to make a soft hand off to the philanthropy team out of fear the corporate contact will be upset they are now being pursued for a donation or, indeed, that the contact will shift from being a corporate sponsor to becoming a philanthropic supporter. Added to this is the fear of losing the control of information and the relationship—especially the VIP relationship. The internal hand over is not worth the risk in the eyes of the corporate sponsorship team. The reverse dynamic is also commonly seen: the philanthropic team resisting opportunities to assist the sponsorship team.

The tension that has been created can inhibit teams from working together and in the end it is the organisation that is the loser when potential revenue is left on the table. What I term Selfish Relationship Syndrome (SRS) is the result of this competitive dynamic.

SELFISH RELATIONSHIP SYNDROME

SRS becomes an issue when a staff member exhibits certain characteristics of relationship protectionism—opinions, emotions, or behaviours—with a key stakeholder. The staff member will be of the opinion that only they know the next best move in progressing the potential support to a sponsorship or philanthropic gift, and you will notice that:

other ideas are not typically embraced

information is withheld from the organisation’s database (this empowers the staff member because they know something about the potential supporter that others do not)

there is resistance to other members of the organisation meeting privately with the stakeholder (even if the staff members are professional and well-regarded)

answers are given on behalf of the potential supporter in a strategy meeting as if they know how the stakeholder would respond

visits or interactions with the potential supporter that are not recorded or shared among colleagues.

In the end, the staff member comes to believe they own the relationship.

RISK FACTORS

Sometimes staff have good reason to be protective of their donor relationships. Often the rationale for SRS is the fear that something or someone at the organisation may do harm to the relationship or embarrass the organisation. When years of good work from a fundraiser or corporate sponsorship professional are undone by a team member, this incentivizes selfish donor relationships.

Similarly, risk factors can emerge when an organisation has a track record of previous miscues with potential supports. Not all engagement or cultivation scenarios go as planned and these hiccups often get repeated over and over at an organisation reinforcing cautious behaviour which can promote SRS.

If a member of the staff has any success in repairing a damaged relationship because of the historical blunders he/she will be rather protective of the relationship and will exhibit no shame in doing so given previous faults.

PRIORITISE INSTITUTIONAL RELATIONSHIPS

There are some businesses where a potential supporter may follow a staff member when they depart an organisation to go work for another, such as an accountant. However, this isn’t the case when it comes to philanthropic dollars or even sponsorships. Rarely, if ever, do donors follow a major gift professional to their next non-profit organisation and start donating to this cause.

Organisations need to prepare for changes to staffing. Fundraisers, and leaders, come and go. When a staff member leaves, often the organisation does a very poor job of a handover and this results in disengaged supporters moving their interest elsewhere. Building an institutional relationship is necessary for maintaining long-term major gifts, bequest consideration, or sponsorship opportunities.

There are ways to battle SRS and get teams, such as the philanthropic and corporate sponsorship teams, working together to produce a higher return for the organisation. You don’t need to create unhealthy competition.

Chequebook charity: this was a term used years ago in philanthropy to imply that a donor would make a gift without concern for the return on the gift. The charity made a request and a donor would simply get out his or her chequebook and write the cheque. Of course, there were exceptions, with some donors demanding more from the organisation. The exception has now become the norm, however, with the concept of chequebook charity disappearing much like the physical chequebook. More and more donors seek more from organisations and as a result the concept of philanthropic investment is now central to understanding donors. But is there more to know about philanthropic investment?

The notion of philanthropic investment is about making a wise investment in an organisation. It now underlies most requests for support from potential donors and philanthropists. It works like this: the organisation positions the proposal for a gift as a philanthropic investment and demonstrates the return (or outcomes) the organisation is seeking as a result from the generosity of the donor. Donors have no interest in bailing out an organisation because of mismanagement or because the organisation failed to plan for a changing landscape that is negatively impacting the organisation’s revenue stream. Instead, donors demand, and rightfully so, that their gifts be used to support meaningful outcomes that will allow the organisation to fulfil its purpose.

Positioning a potential gift as a philanthropic investment and expressing the ROI (Return on Investment) is rather mainstream now throughout the fundraising landscape. Organisations carefully articulate and aim to demonstrate, through proper stewardship, that the donor’s gift is making a positive impact on fulfilling the organisation’s purpose. Unfortunately, some stewardship programs are better than others and, further, some organisations get the proposal wrong with respect to the expected impact of the gift, leaving donors to wonder why their generosity didn’t accomplish the desired outcome(s).

Granting foundations have been known to push back on organisations before investing in a proposal because they have learned over the years what is possible and what isn’t. Their raison d’être is to support the non-profit sector by awarding grants judiciously and they make better choices during this process by engaging in a robust application processes, by having experts provide critical insight, by sharing lessons learned among the foundation granting community, and, frankly, through years of experience. Granting foundations have perspective that many individuals don’t have given the volume of philanthropic work that granting foundations carry out.

In the early 2000s, Bill and Melinda Gates were concerned about the state of American high schools and invested $2 billion to develop smaller schools. However, in 2008 the funding stopped because, as Mr Gates explained, “The overall impact of the intervention, particularly the measure we care most about—whether [pupils] go to college—it didn’t move the needle much…We didn’t see the path having a big impact, so we did a mea culpa on that.” A lesson learned was the lack of required financial commitment from governments and/or acceptance by the wider-teaching community and the funds were being treated as chequebook charity. These experiences have made the Bill & Melinda Gates Foundation better at what they do and have resulted in more and more foundations using leveraged philanthropy.

Leverage is using something to maximum advantage. Today’s donors are seeking ways to leverage their giving by working with the organisation to develop a new structure or blended gifts.

The matching gift program is the historical leveraged philanthropic investment, but it was traditionally limited to government or businesses that provided a matching gift program for their employees. Usually an employee would donate $100 to an organisation and the company would match 1:1, 2:1, or even 3:1. The other more common matching gift concept involved a donor pledging, say, $100,000 and the organisation would use it for a matching gift campaign to attract first time donors: the matching challenge would be used to promote to first ever donors if they make a gift their gift will be match by Mr and Mrs Good Donors until the $100,000 has been reached. Both matching concepts, however, didn’t require much on the part of the organisation and that is where leveraged philanthropic investment is changing this. Organisations are asked to demonstrate how much they value the opportunity to secure a major gift.

For example, a university needs a new parking garage, but lacks the required capital. In conversations of this need at a board meeting, a member of the board, who also happens to be a philanthropist, understands the logic behind the situation and is interested in helping. However, the philanthropist has no interest in having their $5,000,000 gift be known as the gift that built a new parking garage. The parking garage would be a revenue generator given the demand and the fees for daily or monthly parking rates. The philanthropist instead elects to leverage their $5,000,000 gift by placing a condition on the gift—the future revenue generated from the parking garage will be used to fund scholarships for students who demonstrate financial need. Future funds generated from the parking garage are no longer unrestricted. Instead, the philanthropist is associated with a generous scholarship program, the university saves on the associated borrowing costs to build the parking garage, and the parking garage will serve as a mutually vested interest in advancing the purpose of the university.

Often the needs of an organisation and the desired interests of a potential donor don’t align. For example, the organisation may make the case that a particular project is critical to the organisation and there is an urgent desire to get the project underway. Although the donor can logically relate to this project, emotionally it does not move them.

Another scenario might involve an organisation that is undertaking a multimillion dollar campaign and approaches a donor for leadership support to advance a plethora of areas in hopes that one of these areas will resonate with the donor. In this scenario, the donor may have an emotional connection to one of the projects, but the higher the requested gift, the more likely the decision making will involve some critical logic on the part of the donor. This logic may have the donor asking about the organisation’s skin in the game or how the donor can leverage their philanthropic investment to make an even bigger impact with their giving. For example, the donor may ask the organisation to match his/her gift to create a lasting endowment that results in doubling the impact.

In some instances, organisations need to pivot from just acting as a receiver of generosity and acknowledgment via the standard stewardship program because philanthropists are looking for more. Donors are demanding their leadership gift be viewed not just on the face value of the dollars, but also in the creativity in how the gift is structured so there can be a multiplier effect. Organisations may want to rethink proposals to donors and brainstorm the opportunities how those major and leadership gifts can be leveraged.